Why the Euro Shows the S&P Will Hit 1,000

CNBC.com

Wednesday, 24 Jun 2009 | 7:05 AM ETCNBC.com

SHARES

The recent rally in the euro is a positive sign for the S&P 500, because it shows appetite for risk is still strong and the S&P could hit 1,000 this summer, Kevin Cook, market analyst at PEAK6 Investments, told CNBC Wednesday.

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"The positive correlation here between the S&P 500 and the euro has been unbelievable in the past three quarters," Cook, who is also a technical analyst, told "Worldwide Exchange".

"The euro is telling us that the S&P is going to react pretty strongly to the FMOC today. Even if it's not an up day today I think the S&P will hit 1,000 this summer," he added.

There are going to be a lot of buyers if the index goes towards 880, and there is still "a ton of support" at 850, according to Cook.

It is still a bear market rally, but bulls have the upper hand now, as fund managers "have to pile into this market," he explained.

"Another run at 950 will be in the cards probably in July," Cook said.